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A New NIL Bill Aims To Outlaw Nonprofit Collectives

  • The bill would prohibit companies, donors, or others who fund NIL deals from writing them off as tax deductions.
  • It’s the first with the sole purpose of attacking nonprofit NIL collectives.
NFL Congress
Josh Morga/USA TODAY

A new bill introduced in Congress on Wednesday is taking aim at name, image, and likeness collectives that have organized as nonprofit 501(c)(3) organizations.

The “Athlete Opportunity and Taxpayer Integrity Act,” introduced by Sens. John Thune (R-SD) and Ben Cardin (D-MD), would outlaw companies, donors, or others who fund NIL deals from writing them off as tax deductions. 

“This common-sense legislation would prohibit these entities from inappropriately using NIL agreements to reduce their own tax obligations,” Thune said in a statement. “These basic taxpayer guardrails would protect athletes, strengthen NIL, and uphold the responsible stewardship of taxpayer dollars.”  

A press release introducing the two-page bill specifically referenced collectives that have organized as nonprofits, calling their NIL deals “inconsistent with the intended purpose of the charitable tax deduction.”

The bill is the latest in a litany of legislative proposals aimed at governing the new NIL landscape, but it’s the first with the sole purpose of attacking nonprofit NIL collectives. From Ohio State’s Cohesion Foundation to Texas Tech’s Matador Club, these organizations have become increasingly popular in recent months.

When it comes to dealing with the IRS, the collectives can certainly ask for forgiveness rather than permission. But some experts have warned that they could be risky at best and illegal at worst — even without a formal bill defining their status.

It’s unclear whether the bill will pass. Notably, however, both senators are part of the Subcommittee on Taxation and IRS Oversight — Thune is the ranking member. 

While it has bipartisan support in the Senate, which is a positive sign, college sports officials like SEC Commissioner Greg Sankey have said they don’t expect any real movement until after the November election.

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